THE NEW WHEAT

Timaru Herald, Volume CXLIII, Issue 20639, 30 January 1937, Page 15

THE NEW WHEAT

PRICES FOR 1937 AND 1938 THE POSITION DISCUSSED The announcement, by the Minister of Industries and Commerce, of the price of wheat at 5/3 per bushel for the 1937 and 1938 crops, has created considerable controversy among wheat growers, the general contention being that on account of the increase in costs the price is on the low side. In the latest issue of the Wheatgrower, which is just to hand, the new wheat price is fully discussed. It says: As is natural the price has not pleased everybody, but of one feature there is unanimous approval—that is. the principle of fixation of the price for the succeeding crop. Growers now know what they are to receive for their 1938 wheat before commencing to prepare their ground. The result should reveal more definitely than has been possible in the past the extent

to which growers as a body will respond to the guarantee of a fixed price. The erratic acreages of recent years—as an instance from 302,000 odd acres for 1933 to 222,000 acres for 1937 were the natural result of the uncertainty as to prices. This uncertainty for the 1938 crop has now been removed. Price 5/3 f.o.b. nearest port. The price of 5/3 f.o.b. grower’s nearest port, for Tuscan, March basis, marks an appreciable advance on the price for last season’s wheat, actually 5Sd a bushel. It is plain, therefore, that the Minister has kept his promise to take into consideration the extra costs involved in the production of the cereal. When the price for 1936 was fixed the Government gave the growers 4d a bushel more than they received in 1935. The actual pay-cut for 1936 after the final payment is made, as stated elsewhere, will be on the basis of 4/91 d. Tuscan, March basis. The pay-out for 1935 was was due to a profit made on the carry was due to a profit made on the carry over from 1933 and 1934, and could not possibly have been earned on the prices ruling in 1935 without that carry over. Monthly Increments The new price, which is subject to

the usual brokerage and costs ot administration it should not be overlooked, is subject to the annual monthly increments, and a grower holding his wheat over until June and after will receive from 5/6 to 5/8 for Tuscan and proportionately more for the higher grade varieties. It is interesting to note that just before the publication of this issue a cabled quotation was received from Melbourne offering wheat at 5/33d., sacks included, which is equal to delivered, North Island, 5/101d, ex-sacks, The relative cost of South Island wheat at North Island ports on the new price is 5/10, so that from this point of view there is little difference from the two sources. But the Government has placed an embargo on the importation of wheat and fleur, thus conserving the New Zealand market to the New Zealand grower. Embargo on Wheat and Four The importance of this should not be overlooked, as in previous years, such as 1933, for instance, the Dominion was regularly importing wheat and flour and at the same time 1,000,000 bushels of excess wheat were sent out of the country at a very low figure, which reduced the final payment to the grower to the low price of 3/10. Such an absurdity will not recur whilst the embargo is in existence. It is the wheatgrower’s job to see that the embargo is kept in existence. He can control the position by growing enough wheat for the country’s use. If he falls to do this he cannot expect the embargo to be maintained. That is the plain logic of the position. Only 222,000 Acres Sown At the moment the prices of lamb, mutton, and wool are very attractive — at such a high level, indeed, that there is more scope for them to come back in price than to advance. Half of the wool of the present season has still to be marketed, and nearly all the lamb and mutton, and there may be great changes before the 1938 crops of these products come on the market. There will be no change in that period as far as wheat prices are concerned. The grower will receive his 5/3 for March wheat. This season the area has dropped to the disturbingly low level of 220,000 acres. Another 25 to 30 per cent, acreage is required to place the Industry on a basis that will render it exempt from the wrangle of politics. Control of Feed Wheat The Minister has indicated that feed wheat will be controlled. This should be of distinct advantage to the grower, as during the past two or three years the price of fowl wheat to the grower has been very much below the selling price of milling wheat. At the same time the grower has to adopt the national viewpoint in regard to feed wheat, as the very important poultry Industry must be considered. The price of feed wheat has not yet been indicated—it is one of the features of the plan which will have to be worked out by the Wheat oCmmittee.